Will Pune outpace Bengaluru to become India's next startup hub?

Pranjal KshirsagarJun 29, 2016 16:58:26 IST

Maharashtra CM Devendra Fadnavis recently expressed the state government's intention to develop Pune as the startup hub for Maharashtra. He went on to say that Pune could be the startup hub of the country.

A seemingly tech savvy minister and a proponent of the government's Digital India, Make in India and Make in Maharashtra initiatives, Fadnavis has already seen his state bring in investment from Silicon valley giants. Microsoft has already started providing key technology and infrastructure for ideas like 'smart villages' and other citizen services.

In addition, the Redmond giant set up data centres in Mumbai and Pune, thus launching its public cloud locally. At the recent AWS Summit, Fadnavis also welcomed Amazon's announcement of the availability of Mumbai as a new AWS Region. The company said that the new Mumbai Region is currently available for multiple services, including Amazon Amazon EC2, Amazon S3 and Amazon RDS, and is the sixth AWS Region in Asia, thirteenth worldwide.

Coming back to the Pune leaving behind Bengaluru as the startup hub of India, we dig in a little deeper to see if there is really some merit in the claim. Shobhit Srivastava, Research Associate – Mobile Devices and Ecosystems at Counterpoint Research tells Tech2 that there are a number of factors to be considered for a city to be a startup hub. These include talent pool, available investment and a healthy audience or market for the product the startup is offering.

"Bengaluru has been spearheading in all three domains with 311 startups getting funded since 2011 to 2015. Delhi NCR is still undoubtedly at second spot with a huge population, having high disposable income and a number of investment firms based in the capital makes it an ideal place. In the same period 236 startups raised funding in NCR region," explains Srivastava.

He highlights that Telangana government has also been pro-active in attracting a number of MNCs and startups to Hyderabad, setting up a startup incubator THub, to promote technology innovation in the region. He adds that companies are always keen on taking advantage of government offerings when it startups. Srivastava feels that Pune surely has the potential to be in the top of list of preferred cities by startups as its boasts of a vast IT talent pool and cheap real estate. According to this report, Pune already has approximately 322 startups and the number is climbing steadily.

Having said that, Srivastava also believes that the city has a long way to go to catch up with Bengaluru, Delhi/NCR and Mumbai purely due to lack of investment opportunities. "Startup incubators can be setup in collaboration with the government to encourage startups willing to go ahead in Pune," Srivastava says, talking about what he believes should be the next step that Maharashtra should take to actually live up to the prophecy.

Sanchit Vir Gogia, Chief Analyst & CEO, Greyhound Research believes that Pune as a startup hub is actually a logical idea. He feels Bengaluru is saturating. The cost of living, office rentals or purchase prices, extensive travelling distances within the city (from an office space to the airport, for instance) is a becoming a put off for startups.

"Pune is an attractive prospect as it has a massive talent pool which is of good quality and it has fairly decent infrastructure. The Mumbai-Pune connectivity is also a strong factor that would attract startups," says Gogia listing out the pros. Also, there are major datacentres set up in and around Pune, which is one of the most enticing factor for startups. "Connectivity and Internet access are things which startups thrive on and Pune can offer that," believes Gogia.

Pune is also seeing interest from industry mentors and startup accelerators. Singapore-headquartered Govin Capital recently entered into an agreement with Pune based Seed Infotech to launch the Pune chapter of its Startup Accelerator India. IIM-A’s Centre for Innovation, Incubation and Entrepreneurship (CIIE) and SAP Labs are now planning to replicate the region-focused Gujarat Accelerator in Pune.

NASSCOM, under its 10,000 startups program has launched startup warehouses in Pune, along with Navi Mumbai. The startup warehouses will be set up by NASSCOM in association with MIDC and establish Navi Mumbai and Pune as emerging destinations for global businesses and entrepreneurial ventures. They will provide physical infrastructure, offering space to early stage IT start-ups and incubation centres at a nominal rent with all necessary amenities and affordable co-working space conveniently located in the centre of the city, says NASSCOM.

Maharashtra CM Fadnavis also said recently that the land of the Pune International airport would be finalised soon, further fuelling the city's desire to be top notch industrial and startup hub. As Gogia puts it, it's a very real possibility and Pune has all the ingredients to make a playing field where startups can flourish.